College Grads Aren't Just Going to the Coasts

Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts

(Bloomberg View) -- California's San Jose-Sunnyvale-Santa Clara metropolitan statistical area -- also known as Silicon Valley, or at least most of Silicon Valley -- has seen the biggest increase in the percentage of its population with college degrees from the 2000s to the 2010s of any large (1 million or more population) U.S. metro area.

That's a mouthful, I realize. It also fits what has become a well-established narrative about regional economic success: The rich keep getting richer. The percentage of the population 25 and older with college degrees is an imperfect but quite useful indicator of an area's affluence and potential for income growth. The San Jose area was already tied with the neighboring San Francisco area for second-highest percentage of college grads in the 2000s. Now it's alone in second place behind the Washington metropolitan area.

But hey, look at some of the metro areas where the college-graduate percentage grew almost as fast as in San Jose:

These numbers are from the new American Community Survey five-year estimates released by the Census Bureau last week. The advantage of using five-year data is that the margin of error is less than over shorter periods, so we can be pretty confident that these rankings reflect something close to reality. And that reality appears to be that it's not just predictable magnets such as San Jose, Denver and Portland, Oregon, that are attracting college graduates these days. Some Rust Belt cities, and a couple of Eastern cities emerging from the shadow of bigger neighbors with more expensive real estate, are succeeding at it, too.

To be sure, most of these areas already had above-the-norm college-grad percentages in 2005-2009, when the national average was 27.5 percent. But Cincinnati and Pittsburgh were only barely above that average, while Buffalo, Grand Rapids and Louisville were below it. (The national average for 2012-2016 was 30.3 percent; of the metro areas on the list, only Louisville trails that.)

This seems like it's probably a really healthy development. Emily Badger had a piece in the New York Times last week headlined "What Happened to the American Boomtown?" that lamented the inability of the nation's most prosperous metro areas (San Jose is at the top of that list, too) to add enough new housing. The underlying argument of the piece is that zoning laws and other restrictions in these in-demand areas have become a big drag on overall U.S. economic growth.

Having made similar arguments again and again myself, I'm not going to disagree. But I also don't think we can expect dramatic changes on that front anytime soon. Creating new, less-overcrowded magnets for well-educated workers may be a more realistic workaround. Which is exactly what seems to be happening in Grand Rapids, in Pittsburgh, in Baltimore.

It's also happening in and around college towns, which dominate the list of smaller metro areas with big increases in the percentage of college grads.  

The list of areas with declines or no increase in the percentage of college graduates, meanwhile, is made up mostly of smaller metro areas without big higher-education presences that had pretty small college-grad populations to begin with.

There are a few glaring exceptions here: Knoxville and Winston-Salem are home to major universities (the University of Tennessee and Wake Forest University), are centers of metropolitan areas of more than 600,000 people, and started off with college-grad percentages above or not far off the national average. Bowling Green and Lafayette are smaller but also have pretty big universities (Western Kentucky University and the University of Louisiana at Lafayette).  Having a college apparently isn't always enough to make your area a magnet for college grads.

Overall, though, the message from the no-growth-in-college-grads list does fit a well-established narrative: Small metro areas without major universities are having a hard time turning around their flagging fortunes. Ninety-seven of the hundred metros with the lowest growth in college-grad percentage have fewer than a million people; most have much fewer.  Most small cities will probably continue to struggle as economic activity shifts to big metro areas. But at least the news from Grand Rapids and Bloomington is good.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”

  1. PriceWaterhouseCoopers' much-watched MoneyTree venture capital reports now define Silicon Valley as "cities south of Highway extending east to the Nevada border and south to include Fresno County."

  2. There are only metro areas in this table because Burlington, Vermont, and Portland, Maine, were tied for 15th with a percentage point increase, and our in-house charting app rebelled when I tried to make a table with entries.

  3. Bowling Green State University, in case you were wondering, is in Ohio.

  4. The three big metro areas that made the bottom-hundred list are Charlotte, North Carolina; Las Vegas, Nevada; and Riverside-San Bernardino, California.

For more columns from Bloomberg View, visit http://www.bloomberg.com/view.

©2017 Bloomberg L.P.

Bloomberg
Stay Updated With View News On BloombergQuint
Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts